Week Ahead Market Commentary – September 23, 2024
The “Fed Put” Is Alive And Well
After 1½ years of a tightening monetary policy, last Wednesday, the Federal Reserve (Fed) pivoted to a path of easing – and ongoing easing – by lowering the benchmark Fed Funds rate by 50 basis points (0.50%). This was a highly unusual move by the Fed to cut so aggressively with an economy that is still growing strongly at 2% and a labor force at full employment (though, admittedly, it is slowing). Traditionally, a 50 bps cut is done when an economy is under stress or if there is financial stress within the system. The typical (and expected) pace would have been to cut by 25 bps only. What we’re seeing is basically a “Fed put.”
Keep reading: